graham
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My thought here is that the AA may calculate a range of reasonable estimates for claim liabilities in addition to a point estimate. The reported reserve might be less than the point estimate, but still within the AA's acceptable range.
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Unless I missed something, I didn't see that the text discussed what proportion of the 12m was for pecuniary versus non-pecuniary damages. If the full amount of 12m was exclusively for pecuniary damages (medical care, loss of income,...) then you…
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If you go to Level 3: Custom Battles, select McD.Intro, and for Optional Setting C, select BattleCards of lower probability. That might be what you're looking for. If not, let me know.
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Yes, that's correct and I've also added a short example in the wiki: http://www.battleactsmain.ca/wiki6c/ERD_Example
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I think I'd need to see your calculations to be able to comment further.
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It shouldn't make any difference. Do you mean you split the unpaid into gross and ceded using the 25% ratio, and then calculated APV(net) as APV(gross) - APV(ceded)? I think that would be a messier calculation because it's easy to get "+" and "-" mi…
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I think you need to include a few more details. For example, why did the insurance risk go up? You could say it went up because claims increased and claims liabilities are a component of insurance risk. (The answer I gave in the BattleCard might be …
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As you noted, PfADs would be 0 for paid amounts. I believe PV(paid) = paid though because you can't earn investment income on paid amounts. That money is no longer in your possession. You might argue that it should be adjusted for inflation if you w…
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The way I read it is that the act would have required a federal license for an insurer operating in more than 1 province. Since the act was ruled ultra vires, insurers operating in more than 1 province can get either a federal or provincial license.…
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Yes, I believe you are correct. I will make a note of this in the wiki. It seems the examiner's report assumed only 1 loss and did not consider the possibility of a second loss in the same year. Thx!
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Interesting question! It's similar, of course, to 2014.Spring Q34c where they asked you to compare the materiality level for DCAT versus valuation work. The answer provided was quite short and indicated very generally that valuation work would have …
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Interesting. I didn't know that, but it doesn't surprise me. Once you dig down, there are a lot of issues with exam 6, but it would take an enormous effort to resolve them, and there is ultimately no real incentive for someone to assume that task. I…
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This value of 0.2929, which is actually 1-sqrt(2)/2, is from an old version of the premium liability calculation. You do not have to know this. The new version of premium liability calculation came on the syllabus for the 2017.Spring exam. Any exam …
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Here's the big picture for how I make sense of this formula: * You don't have to pay taxes on your losses or liabilities, but in insurance you don't know what your losses are until the claims are closed. * So, they make you pay taxes on a smal…
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Oops, yes. I had the decimal in the wrong place. I've corrected it. Thanks!
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It looks like you answered your own question? In the wiki, I introduced APV for claims in the very first boot camp article because it's so important. It underlies many of the common calculation problems, but the actual theoretical material is hidden…
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Yes, your answer should be fine. Most of their items were indeed insurance-related, but I did notice a couple of things in the middle of their long list that were not insurance-related, like education and health care. Your examples were listed in…
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Here's the thing: These papers were written by 2 different authors, and I'm beginning to wonder if I've made too big a deal out of the difference between them. Maybe Baer and McDonald were expressing the same idea even though they used slightly dif…
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You should ignore the 2014.Spring problem. It's all messed up. I will insert a note about that in the wiki. (One reason is that they assume the capital required is the same for all scenarios.) You're right that there is inconsistency in how all t…
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That's a very good question. This paper is also on Exam 6-US and there has been a lot of discussion there on that topic. It certainly doesn't seem that 50% should qualify as "substantially all". But the text says "substantially all" means: *…
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Thx chrisboersma. Well said. (The BattleCard was unclear. I've edited it.)
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The MCT paper doesn't specifically provide a formula so I invented my own. My formula is algebraically equivalent to what they did in the text and gives the same answer as can be seen as follows: * Growth from 150 to 225 is 50% * Therefore gro…
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User chrisboersma is correct that this case is indeed still on the syllabus. This is an example of where I made the judgment that the AG(ON) v Reciprocal Insurers had a relatively low probability of appearing on the exam. Even though it is still …
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That case was added in Fall 2017 to the updated version of the subsequent events reading and I actually just forgot to include it. But now that I think about it, it might be a better exercise to read it on your own and summarize it the way I've done…
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I'm glad you asked this, and I hope other people read this post. The thing I didn't like about this exam question is that if you didn't notice the data is for a reinsurer, you would get it all wrong. Usually, the first paragraph of these types of qu…
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Maybe it's late and my brain isn't working properly? But I don't know why they mentioned adjusted equity at all. The ROE formula according to MSA is slightly different from the ROE formula according to the annual statement instructions. They indi…
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Thanks chrisboersma for answering about the time value of money on point 2 from christinedu. (Actually, it looks they did discount the maintenance expense in the examiner's report, but I would not have bothered because it isn't material.) For poi…
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Yes, thanks. I've corrected it.
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Yes, this is a little vague in the paper. The question in the decision tree is: * Does the event make the entity different? If you then look at the 2 possible answers in the decision tree, one says "on or before CalcDt" and the other says "…
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Hello cgc2018, You're right that you can't calculate PfAD for investment because you would need the following information which they don't provide: * MfAD for investment * discount rate * payment pattern That's why they just tell you t…